This past month, headlines of Disney+ “shutting down” have captured the attention of streamers and advertisers.
You might be surprised at first if you heard about Disney+ shutting down and then you search “Disney+ shutting down” (or “Disney plus shutting down”). But not to worry, the major streaming platform isn’t going away – it’s just getting a makeover. US audiences will soon notice their Disney+ and Hulu subscriptions are one and the same. This means audiences will get all the same shows they love, just in the same place.
This move comes after Disney’s purchase of Comcast’s remaining stake in Hulu last year and is a way for the company to consolidate costs and more effectively compete in the streaming market. By combining the two services into one, Disney can get a necessary edge on competing platforms, like Netflix, which has up until now had a larger catalog of content.
Disney+ has consistently lost money since its 2021 launch, with its $387 million loss in Q4 being a 74% year-over-year improvement from its $1.4 billion loss in Q4 of 2022. This merging of platforms is part of the company’s loss reduction plan, with hopes that the combined platform will increase engagement and ad revenue while lowering customer acquisition costs and reducing churn.
US subscribers of both Disney+ and Hulu can expect to see a beta version of the combined Disney+ and Hulu next month, with the full rollout expected in March of 2024. Disney CEO Bob Iger hopes that this gives parents enough time to adjust and set parental controls for Hulu’s less kid-friendly content.
This isn’t a first for Disney+
Noticeably, Disney already runs this business model in other countries, like Canada, where they introduced Star as a content option inside of the Disney+ experience where viewers can access content from Hulu and other sources outside the Disney and Pixar brands.
Star has been available since 2021 in much of the world including in Europe, Asia, the Middle East, South Africa, and North Africa, in addition to Canada. This service includes content from several brands owned by Disney, like 20th Century Studios, FX, and even some Hulu shows.
Similar to Disney’s other brands, Star appears as a menu option on the Disney+ platform. So, instead of selecting Pixar or National Geographic, users can select Star to view FX or Hulu content.
Since this is already part of Disney+’s business model in so much of the world, it makes sense that the streaming service is looking to adapt it to its US market.
How will this impact advertisers?
The question at the top of every advertiser’s mind in times of change is: how is this going to impact my strategy? And the answer to that is to look at the markets using Star and see how this larger audience base impacts the CTV strategy in those regions.
As the company transitions to include a broader range of content, marketers will need to consider how their audiences will intersect. This means some brands may wish to start adding Disney+ into their CTV mix to reach their audience on a new platform. This change presents a challenge to marketers, but one that is easy to overcome by understanding target personas and adjusting their display strategies to reach them effectively.